Iraq to select Indonesian firms for trading

JAKARTA (JP): The Indonesian government expects the Iraqi government to decide next week on which Indonesian companies qualify for the UN-sponsored "oil-for-food" program, Minister of Industry and Trade Luhut Pandjaitan said on Friday.

Luhut said the government had recommended nine companies for participation in the program but the Iraqi government would have the final say on which companies would be involved.

"We expect to receive the decision of the Iraqi government by next Tuesday," Luhut said.

He was optimistic that Iraq would select all the nine companies recommended by the Indonesian government, citing that Iraq always respected Indonesia's recommendations.

"We've just explained to the Iraqi ambassador the criteria used to select the nine companies. The Iraqi government will study whether the criteria match with Iraqi ones," Luhut said after meeting Iraqi Ambassador Saadun Zubaydi.

The nine companies are PT Concord Perdana Indonesia, PT Gemilang Energindo Sentosa, PT Sri Mukti Gas Corporation, Golden Spike Energy Indonesia Ltd, PT Utama Bressindo Persada, PT Istana Karang Laut, PT Accia Nusantara, PT Ramada Agung Internasional and Swadaya Sarana Berlian.

The oil-for-food program was devised by the United Nations to alleviate the sufferings of the Iraqi people caused by the economic embargo imposed by the agency.

Under the program, Iraq is allowed to barter its oil with food from other countries.

The country has been under a UN embargo since it invaded Kuwait in 1990, an action that led to the Gulf War.

It was authorized in December 1996 to export crude oil every six months in exchange for humanitarian supplies.

Iraq has allocated Indonesia an average of US$500 million worth of counter-trade or about 20 million barrels of crude oil for each six-month period of the program.

The government initially gave the project exclusively to oil trading company Perta Oil but its re-appointment by the government for the July and December 2000 phase of the program sparked protests.

The government then selected another nine companies for the project.

Perta was formerly 51 percent owned by former president Soeharto's friend Muhammad Bob Hasan and youngest son Hutomo Mandala Putra. The remaining shares were held by Pertamina. Pertamina took over Bob Hasan and Hutomo's shares in 1998 to wholly own the company.

Luhut said Perta was only able to lift about three million of the 20 million barrels of crude allocated for Indonesia.

He said ambassador Zubaydi had expressed disappointment over Indonesia's inability to lift all its allocation.

"We are really ashamed that Indonesia is unable to lift all its oil allocation," Luhut added.

Luhut earlier said Iraq had offered to double its allocation to Indonesia next year from the present $500 million of oil to $1 billion. (bkm)